Hinduja, US-based fund join race for Air India: Report

The Hinduja Group and a US-based fund Interups have decided to join the race to acquire Air India, according to a report by Business Standard.

Earlier, the Hinduja Group had shown an interest in taking over Jet Airways but did not make a formal bid as it felt Air India offered better opportunities. "We are looking at Air India and will take a decision once the bid documents are in place," a source told the publication.

The bidders are now showing interest in Air India because the government transferred Rs 29,500 crore of Air India’s debt to a special purpose vehicle — Air India Assets Holding, which reduced the finance cost of the airline substantially. According to the report, the sale of 100 per cent equity of the airline has also enthused bidders. In May, the government had offered 76 per cent of the equity sale in the last round but it failed to attract any bidder.

Interups told the publication that it was waiting for the Indian government to float the bid document on Air India and that it will be a serious contender.

"We have opened a dialogue with the ministry, and our CEO Louise Jones will be in India next week (to discuss the issue). We have some concerns on non-inclusion of maintenance, repair, and overhaul (MRO) assets in the acquisition and would put our appeal before the government, as without MRO, it will be difficult for our identified operators to manage aircraft maintenance," Laxmi Prasad, chairman and chief business architect of Interups told the publication.

Earlier, the Tata Group had expressed an interest in Air India, but it may not go ahead over fears of litigation, as per the report. The group already owns two airlines -- Vistara and Air Asia India.